WASHINGTON Oct 6 Deutsche Bank and many other
major banks need to reexamine their business models to maintain
long-term profitability in a very low interest rate environment,
International Monetary Fund Managing Director Christine Lagarde
said on Thursday.

Lagarde told Bloomberg Television at the IMF and World Bank
fall meetings in Washington that Deutsche Bank must
"decide what size it wants to have and how it wants to
strengthen its balance sheet. But it's not the only one in the
banking basket that has to do that job."

During an earlier news conference, Lagarde said many banks
around the world need to revamp their business models to deal
with current ultra-low rate financing conditions, and that the
IMF believes there are the means and a determination to do so.

Market worries about Deutsche Bank's balance sheet in the
face of a U.S. government demand for $14 billion in fines have
cast a shadow over the start of the IMF and World Bank meetings,
which will include the world's top finance leaders and
commercial bankers.

Lagarde told Bloomberg Television that a settlement of U.S.
Department of Justice charges over Deutsche Bank's sales of
mortgage-backed securities leading up to the 2007-2009 financial
crisis would be welcome because it would provide some certainty
over the impact on the bank's balance sheet.

Regarding Germany's proposed, 6-billion euro tax cut plan
, Lagarde said she hoped it would be part of a
larger fiscal spending plan that "will exploit the fiscal space
that Germany has available" and include infrastructure
investments.

"Given the very, very low financing costs, particularly for
a country like Germany, it is certainly the right time to
develop infrastructure further," Lagarde said in the news
conference. "It's not just about Germany, let's face it. Every
country can do something."
(Reporting by David Lawder; Editing by Paul Simao)